T.Y B.COM
SEMESTER - 6
INTERNATIONAL FINANCE
(IT)
MCQS = JANUARY - 2012
1. Which of the following is not an account in the balance of payments statement?
(a) The gold account
(b) The debit and credit account
(c) The capital account
(d) The unilateral transfer account
2. If a country runs deficit in its balance of payments, it must be true that
(a) lts exports exceed its imports
(b) Its import exceed its exports
(c) A compensatory capital or gold out flow is taking place
(d) It is exporting gold
3. Foreign bill of exchange normally supported by
(a) A letter of credit
(b) Bank note
(c) Foreign goods and services
(d) None of the above
4. The balance of payments must be in equilibrium whenever
(a) The balance of trade is in equilibrium
(b) Debits equal credits
(c) The sum of autonomous debits equals the sum of autonomous credits
(d) None of the above
5. Which of the following is not true if a country has exchange control?
(a) Goods which on the basis of comparative advantage should be imported are frequently produced domestically
(b) Black market tend to prosper
(c) Foreign exchange usually sells at different uses
(d) The order of priority for imports is determined strictly by supply and demand
6. Quantitative restriction will
(a) Decrease demand for imported products
(b) Increase demand for imported products
(c) Increase supply of imported products
(d) Decrease supply of imported products
7. Tariff barriers tend to
(a) Reduce the efficiency of world production
(b) Reduce the volume of world production
(c) Raise prices in tariff imposing countries
(d) All of the above
8. Which of the following would not be traded in the foreign exchange market?
(a) British pounds
(b) Time deposits
(c) U.S dollars
(d) Drafts
9. ln case of mint parity theory foreign exchange rate is determined on the basis of
(a) Demand for foreign exchange
(b) Purchasing of the Countries
(c) Metallic contents of the two money units
(d) None of the above
10. Which theory states that equilibrium rate of foreign exchange between two inconvertible currencies is determined by the ratio of their respective purchasing powers?
(a) Purchasing power parity theory
(b) Mint parity theory
(c) Balance of payment theory
(d) None of the above
11. Foreign exchange is determined by
(a) Importers
(b) Buyers of fixed assets abroad
(c) Borrowing from abroad
(d) Both (a) & (b)
(12) The purchasing power parity theory was formulated by
(a) Adam Smith
(b) Leaner
(c) Alfed Marshall
(d) Gustov Cassel
(13) Deficit in balance of payment can be solved by
(a) Expenditure reducing polices
(b) Expenditure switching policies
(c) Both (a) & (b)
(d) None of the above
(14) Difference in export and import of Services is called
(a) Balance of invisible
(b) Balance of trade
(c) Balance of visible
(d) Balance of capital account
(15) Balance of current account includes
(a) Balance of trade
(b) Balance of invisibles
(c) Balance of unrequited transfers
(d) All the above
(16) All items of change in stock are included as
(a) Balance of trade
(b) Balance of invisibles
(c) Balance of capital account
(d) Balance of current account
(17) lf a country has deficit in balance of current account, balance of capital account will be
(a) Surplus
(b) Deficit
(c) Zero
(d) None of the above
(18) Autonomous capital flows are
(a) Planned
(b) Unplanned
(c) Both (a) & (b)
(d) can be either (a) or (b)
(19) In the balance of the payment debit and credit enties wil be
(a) Some time balance
(b) Always remain unequal
(c) Always balance
(d) None of the above
(20) Borrowing from foreigners is
(a) Export or goods
(b) Capital receipts
(c) Un requited receipts
(d) None of the above
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